Innovation Management: Working Smarter with the Power of Collaborative Intelligence

By Howard Eisenberg, President, Syntrek, Inc.

Ninety percent of all new products are actually just simple "line extensions" that fail to substantially increase corporate revenues. Consequently, most established large organizations are staggering, while innovative upstarts are thriving...

Times sure have changed! Computers and telecommunications have
literally transformed our world. We have generated as much new information
in the past 30 years as in the previous 5,000. The half-life of
new knowledge is now less than two years and product life cycles
have shrunk from several years to mere months. The very nature of
change itself has changed! Traditional change was evolutionary and
characterized by incremental, linear alterations. Current change
by contrast is non-linear and characterized by rapid transformations
into completely different processes and structures.

Not surprisingly, most organizations are not coping well with the
onslaught of unrelenting, revolutionary changes. Despite rapid change,
90% of all new products are actually just simple "line extensions"
that fail to substantially increase corporate revenues. Consequently,
most established large organizations are staggering, while innovative
upstarts are thriving (for example Motorola vs. Nokia).

Downsizing or dumbsizing?

To cope, many organizations rely on decreasing short-term costs
by cutting personnel, rather than on value-added enhancements. Ironically,
despite the current popularity of concepts such as "Intellectual
Capital" and "Knowledge Management", most downsizing operations
are actually wasteful exercises in "dumbsizing". As well, about
80% of change management programs fail to achieve their objectives
because of over reliance on simplistic employee "motivational" remedies.
Team-building training programs too suffer from relying on simplistic
"edutainment" and overly optimistic notions of "emotional intelligence".
Even the limited benefits of such programs are undermined by periodic
downsizings, which discourage staff from sharing information and
working collaboratively.

Further, stress overload is now the leading cost driver of disability
and worker's compensation claims. Yes stress management training
programs tend to be poorly funded, staffed by inadequately trained
facilitators and counsellors and function in a superficial, reactive
mode.

Organizations as living organisms

But successful organizations, like living organisms, are intelligent
systems that learn and adaptively apply what they have learned.
Fritjof Capra, a leading philosopher of science and author of the
1996 book The Web of Life, coming from a holistic systems perspective,
identified several basic principles of "Deep Ecology" for sustainable
organizations:

Interdependence: the success of the whole organization
depends on the success of the individual employees, and the success
of each employee depends on the success of the organization as
a whole.

Diversity: yields greater resiliency for adapting to changing
conditions since there are many different information resources
for coping with the various challenges.

These three key principles are scientifically based concepts, but
more importantly they are also supported by research data on corporate
performance. For example, Professors Collins and Porras at Stanford's
Graduate School of Business, and Professors Kotter and Heskett at
Harvard Business School, both independently discovered that the
most successful organizations have strong fundamental guiding values
and adaptive practices. In sum, they were characterized by dynamic
corporate cultures dedicated to employee empowerment and continuous
improvement. According to Professors Kotter and Heskett, this was
reflected in powerful financial performance: These types of corporations
increased their net profitability over an 11-year span by 756%,
in contrast to just 1% for the companies which were not adaptive
to change! (Wal-Mart and Hewlett Packard are some examples.)

Creative thinking and innovation

"Creative Thinking" means original thinking (i.e. a novel way of
perceiving, or rearranging data). "Innovation" by contrast is the
successful application/commercialization of creative thinking and
applies to the various business processes (e.g. financing, production,
marketing, distribution), as well as to the improvement of existing
(and/or development of new) services and products.

Contrary to popular belief, creative thinking is not an ability
restricted to an artistically gifted minority, but rather a learnable
competency for all. Since creative thinking is a learnable competency,
it can be increased by training programs. However, in order for
the creative thinking skillset to really add value, the organizational
culture must also be redesigned to support its rollout as successful
innovations. This requires a lot of hard work and appropriate resources.
(As noted by one of the world's most prolific inventors, Thomas
Edison, "Creativity is 1% inspiration and 99% perspiration").

Innovation management

Despite the effort involved, innovation management, which refers
to the requisite organizational values, resources and processes
that enable a high level of consistent innovation, is now an imperative
for organizations to survive and thrive in this era of non-linear
change. It is also the only sustainable way of working "smarter",
rather than harder.

A recent international survey by Arthur D. Little, an international
management consulting firm, found that 84% of business leaders agreed
that innovation had become a more critical success factor than it
had been five years previously. However, only 25% of businesses
were satisfied by the current level of innovation in their own organizations.

W. Edwards Demming, the "Father of Total Quality Management" advocated
the precept, "Drive out fear", for reinforcing risk-taking, which
is essential for innovation. Yet, individuals will not intentionally
question and experiment beyond the bounds of conventional practices,
unless they perceive it is safe and potentially rewarding for them
to do so. Similarly, teams' collective intelligence will be no greater
than that of its individual members if members fear that data sharing
and collaboration will result in redundancy.

Innovative companies

Progressive, innovative companies, such as 3M, Dupont and Royal
Dutch/Shell, enable all of their employees to have additional time
and financial resources to pursue the development of their innovative
proposals.

Other outstanding innovators, such as Toyota, track managers' success
in encouraging direct reports to generate suggestions for improvement
and include the results in performance appraisals. This results
in more than one million such improvement suggestions annually (95%
of them are implemented.)

Some innovative companies even mandate innovations. For example,
at 3M the divisions are expected to generate 30% of sales each year
from products developed within the preceding four years. This prevents
employees from becoming complacent by relying on the tried and true.

Innovation management requires employee training in creative
thinking, plus modification of the corporate culture to encourage
risk-taking and the provision of logistical resources to enable
the progression from developing creative ideas to successfully rolling
them out as innovations.

This article was published in the November, 2002 issue of "The Training Report," and is copyrighted by its Publisher - Crownhill Publishing Inc.